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Condiment sales have grown steadily over the past five years, and private label suppliers say the continued success of sales will be in expanded flavor profiles
and healthier ingredients.
A Mintel Group Ltd. report “Condiments – US – August 2012” showed that slow sales growth in the category is expected through 2017, with the category reaching about $10.7 billion.
Pickles, olives and relish remain the largest segment of condiments, with Mintel pegging the segment at 26.1 percent of sales in the category. Mayonnaise is second at 22.1 percent, with ethnic sauces at 18.3 percent.
Sales data from IRI in 2012 shows flat sales in private label pickles, relish and olives, with increased sales in salsa and Mexican sauces, and with rising sales in syrup, peanut butter and salad dressing.
Suppliers said that retailers and consumers were demanding more variety from their products.
“The notion that price is the thing that matters first to consumers is a thing of the past,” Wild Thymes Owner Ann Stetter said. “Based on the trends we are seeing, consumers want interesting flavors and healthy products that help them duplicate things they eat in restaurants and read about in magazines. Ethnic cuisines are on the rise, according to all the data and that is exactly what we are seeing.”
Jeanne Meeder, Industrial Ingredients-Consumer Products Director at Wixon, said that her company was seeing changes in the heat content of ethnic sauces.
“Products which deliver ‘heat’ are still in high demand, but are moving well beyond the old standard jalapeno and cayenne to more varietal chili peppers such as ancho, habanera, guajillo and ghost peppers,” Meeder said.
Wixon Corporate Chef and Manager of Culinary R&D Mathew Freistadt said that although changes to sauces are usually proactive in the market, gourmet salsas and ketchups are a recent trend.
“Curry ketchup, Texas steakhouse, bacon ketchup, (and) sauces like Korean BBQ are also gaining a lot of popularity,” he said.
But in addition to alternative chilis, Meeder said more heat also was on the menu.
“Products which deliver ‘heat’ are still in high demand, but are moving well beyond the old standard jalapeno and cayenne to more varietal chili peppers such as ancho, habanera, guajillo and ghost peppers."
“We are seeing a surge in requests for complex ‘heat’ flavor profiles, such as chipotle, sriracha, harissa and ancho chili lime,” she said.
But spicier and exotic flavors aren’t all the rage. Terri Fubio, director of private label sales for DelGrosso Foods, said her company was seeing request from unusual sources for salsa.
“We are seeing increased interest in private label salsa, especially from non-traditional grocery retailers,” she said. “Most are less interested in specialty flavors, focusing more on the core mild and medium SKUs.”
Pasta sauce sales grew 1.2 percent in 2012, according to IRI data, accounting for 9 percent of dollar sales in the category.
Fubio said healthy ingredients were a key to sales.
“Interest remains strong for both the mainstream and premium tier pasta sauces with retailers continuing to emulate the top-selling national brands,” she said. “Consumers are learning that store brands offer all-natural pasta sauces with quality ingredients at a better price.”
Along with that adoption of private label quality comes the ability of manufacturers and retailers to try new flavors and tastes within the category.
“In the past year, we have formulated some unique flavor profiles that the national brands do not offer, which will soon be released,” she said. “As store brand pasta sauces continue to grow in popularity, suppliers will be challenged with bringing innovative flavors to the table as a way of differentiating the store brand sauces from the national brands.
“In addition, we continue to review our existing formulations, ensuring they were relevant flavor profiles that also provide optimal health benefits.”
Wixon’s Meeder said following healthy trends can mean a variety of different additions and subtractions to a sauce.
“Diet-conscious consumers are looking for healthy food choices that taste great and help them achieve weight management goals such as controlling calorie intake, reducing sugar, lowering gylcemic content, and enhancing overall satiety,” she said. “With growing childhood obesity, parents are looking for products that address greater nutrition in food products for children. They are looking for better tasting low-sugar products, flavorful reduced salt items, and appealing healthier versions of traditional kids products.”
But growing pasta sauce sales is not simply a matter of product, Fubio said. More focused and concerted efforts on the retail end have helped spur sales.
“The gains in private label pasta sauces in the past year are the result of a more concerted effort by retailers to promote their own brands more frequently,” she said. “Some retailers are drawing comparisons in their ads and at the shelf between their store brand and the national brand equivalent to improve consumer trial and repeat purchase, while others are dropping the price point for an extended period of time.”
The result, she said, is helping to build consumer confidence in the product.
“As retailers continue to drive the cost of goods down across the board, including their private brand items, we are receiving more bid requests for the mainstream and premium tier pasta sauces,” Fubio said.
Private label sales across syrup categories grew about 4 percent in 2012, accounting for a little less than 30 percent of dollar sales in the category.
Private label maple, pancake and waffle syrup accounts for the largest segment within the category, at 25.7 percent of dollar sales. Cliff Beahm, the vice president of sales for Griffin Foods, said the company had been drawing interest across the board from retailers.
“The regular, sugar free, and lite syrups draw the primary interest, but our ability to create new flavors also draws interest,” Beahm said.
That includes flavors such as cinnamon roll and butter pecan that were drawing interest.
“The primary growth at Griffin’s on the private label side has been the addition of new flavor profiles,” Beahm said.
Wixon’s Freistadt said there were two basic methods used to alter the flavor profiles in condiments and sauces.
“Actual flavors designed by a chemist and used by the application scientists or research chef, then spices or seasoning systems developed by the scientists or research chef,” he said. “All working together to achieve the flavor desired by the vendor and the customer.”
And that leads to the potential development of healthier formulas.
“A lot of healthier or good-for-you techniques rely on what you have for ingredients and how you use them,” he said. “Reducing sugar with natural sugar replacement technology. Along with sodium.”